Crude Rallies, Natural Gas Stinks (Literally and Figuratively), and Equities Struggle!
This past week showcased a striking divergence between the commodity and equity markets. On the commodities side, strength was broad-based. Crude oil surged by 5.17%, closely followed by Lean Hogs at 5.04% and reformulated gasoline at 4.99%. Coffee and copper also saw meaningful upside, each gaining just under 5%. The rally in these commodities reflects a mix of tightening supply, seasonal demand shifts, and macroeconomic tailwinds for raw materials.
In contrast, natural gas was the week’s clear laggard, plunging by 8.00% as mild weather and oversupply pressured prices.
Agricultural markets were also under pressure, with cocoa down 1.72% and corn off 1.63%. The energy sector as a whole, however, remained firm—reflected in the Energy Index’s 4.46% weekly gain. That said, not all energy names participated equally, as natural gas’s sell-off offset gains in the oil complex.
Equity markets struggled amid rising interest rate concerns and geopolitical unease. The Dow Jones Industrial Average declined by 2.65%, while the Nasdaq fell 2.27%. The broader Equity Index closed the week down 2.34%, suggesting a cautious risk tone among investors. As commodities rise and equities falter, the market appears to be rotating toward inflation-sensitive assets and away from interest rate-sensitive ones.
Looking ahead, market participants will be watching closely to see if crude oil and refined products can sustain momentum, and whether the equity drawdown deepens or stabilizes.
For traders, this environment offers both opportunity and volatility—especially in cross-asset strategies.
The divergence we’re seeing now could widen further, especially if macro themes like inflation, dollar movement, or geopolitical headlines intensify.
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The Trading desk at Stipelis 4-17-2025